China’s carbon market for greenhouse gas reductions, also referred to as the China Certified Emission Reduction (CCER) scheme, was successfully relaunched on Monday, marking a significant step in the country’s commitment to environmental sustainability. This initiative aims to regulate and incentivize enterprises to actively participate in reducing their carbon footprint.
Under the CCER scheme, enterprises are granted the flexibility to engage in voluntary trading of carbon emissions, fostering a market-driven approach to environmental responsibility. This voluntary aspect allows businesses to proactively manage their emissions and contribute to the overall reduction targets set by the government.
The relaunch of the CCER scheme reflects China’s dedication to addressing climate change and aligns with its broader goals to achieve carbon neutrality. By providing a platform for voluntary trading, the market encourages businesses to adopt cleaner technologies, implement energy-efficient practices, and invest in sustainable initiatives.
The scheme operates by certifying emission reductions achieved by enterprises through various measures, such as adopting renewable energy sources, enhancing energy efficiency, or implementing carbon capture technologies. These certified reductions can then be traded among participating enterprises, creating a dynamic marketplace for carbon credits.
This relaunch not only signifies a renewed commitment to environmental stewardship but also emphasizes the role of the private sector in driving sustainable development. By encouraging voluntary participation, the Chinese government recognizes the importance of collaboration between public and private entities in achieving climate goals.
After the CCER was paused in 2017, China has polished and released multiple regulations to strengthen its regulatory frameworks.
As an important supplementary mechanism to the country’s national carbon-trading market, the CCER will play a significant role in achieving emissions cost reductions and renewable energy goals. Under CCER, carbon-emitting companies compensate credit-holding entities for carbon credits and to offset their own emissions. At present, the trading market is mainly open to entities in four major fields, including afforestation, solar power generation, offshore wind power generation and mangrove planting.
Green energy producers can profit by compensating their high operation or maintenance cost by selling carbon credits, according to Yang Pingjian, a director at the Chinese Research Academy of Environmental Sciences.
In 2021, China’s national carbon market started online trading. Carbon emissions by more than 2,000 power companies covered in the first batch of trading are estimated to exceed 4 billion tonnes per year, making the market the world’s largest in terms of the amount of greenhouse gas emissions covered.
As a market-based emission reduction tool, the carbon market realizes the optimal allocation of resources and guides emission control companies in their low-carbon transformation.
